BC Hydro

Evidence of corruption mounts

Economist Erik Andersen, writing at The Common Sense Canadian, contemplates why BC Hydro:

indulged in its aggressive contracting with Independent Power Producers in BC when domestic demand increases are nonexistent.

I suggest you read through Andersen’s material, then consider whether or not a small number of corporations, enabled by Gordon Campbell and the BC Liberals, scored what might be the largest fraud in Canadian history, malefaction that will amount to billions of dollars over time.

Ruination of BC Hydro could only have occurred by thoroughly planned subterfuge or mismanagement of epic scale. I believe the experience of David Cobb provides a strong clue that the former is true, not the latter.

Cobb had been a highly respected executive before appointment as BC Hydro CEO, a position he left after only 17 months. Many believe that Cobb was unhappy that government interference prevented him from addressing serious problems. An internal conference call among BC Hydro staff disclosed Cobb’s position about Liberal government strategy related to BC Hydro:

If it doesn’t change, it would be hundreds of millions of dollars per year that we would be spending of our ratepayers’ money with no value in return…

Indeed, Cobb’s prediction has come true in 2012. BC Hydro is forced to purchase high cost private power while it shuts down its own generators and spills water from its reservoirs. Electricity they could have produced at almost zero marginal cost is replaced in the power grid with power costing hundreds of millions.

Erik Andersen explores the financial destruction of British Columbia’s public utility. Don’t miss the article linked at the top.

Let’s take a look at the record. In 2000 total assets were $11.596 billion; by 2011, assets had ballooned to $19.479 billion. In 2000, total liabilities were $9.320 billion; by 2011 they too had ballooned to $16.599 billion. If one were to add the yet-to-be-collected amounts held in the “Regulatory Assets” accounts (money we owe as ratepayers) that BC‘s Auditor General discovered, BC Hydro would be negative equity, more liabilities than assets.

Had there been a matching increase in demand it would make some sense but in the chart below you can see that has never been so. For several years the unanswered question has been: How could financially literate people steer our crown corporation on such a perilous course? The enormity of this financial fiasco places the prized assets of BC citizens directly in harm’s way with no credible explanation as to why.

This store still operating with new proprietor

42 replies »

  1. I don't know exactly what Hydro is paying the IPP's for power (in the order of 15 -20 cents per kw hr?) but if they turn around and sell it for 3.5 cents to the mining community my 10 year old grandson will tell you they are losing money – and he 'works' for $5 PER WEEK!
    Good Grief! Words fail me!!
    Perhaps he could straighten out the Ferry system while he's at it!


  2. Under the comment box, there should be: Reply as: then a drop-down box that provides options to use one of five profiles that people sometimes use. Below the profiles are options for completing a name or choosing anonymous. You can fill in any name you wish to use. To comment with your pen name 'John's Aghast' (a good one too), select Name/URL, fill in the name box with the pen name and leave the URL blank. The latter would only be used if you had a personal website to add, in case you are publishing more words of wisdom on the web.


  3. I can't believe there is no way, besides voting them out, to hold these people accountable for the untold damage they have caused to BC and to taxpayers. Unbelievable!


  4. There is a way Cheryl, we are just in the “discovery” process. After that, we move to Prosecute, internationally if necessary. By way of the ICC, or the UN?


  5. Unfortunately cherylb, we probably won't hold anyone accountable in the ways that major thieves should be punished. White collar crime, particularly massive white collar crime, seldom leads to severe punishment. Jails are reserved for relatively small scale crooks, people who are socially unimportant.

    I suspect that the contracts written for power deliveries over the next four decades will be very one sided in protecting IPP's from cancellation without huge payouts. Probably, we're done. The next two generations will pay and the tab is already nearing a billion dollars.


  6. I wonder where the money trails leads?
    As they say, follow the money.
    Could some high ranking politicians & insiders have benefited from this fiasco?
    Could & should we ask the same of BC Rail?


  7. And will we be asking the same of the Liquor Distribution Branch now being readied for Rich Coleman's pals? (I wish he'd stick with his land developer friends.) For the LDB disposal, we'll be paying every time we unscrew the top of a wine bottle or sip from our favourite keg.


  8. Norm, I respect your opinion and of all the places I comment on your site to me is without doubt required reading for anyone wanting intellectual and logical thought of the upmost integrity.
    However in this situation with respect to your reply to cheryl I must disagree.
    What the next generations do is not for us to say. Hopefully they will be stronger than we in our genaration have been. Hopefully they will pay attention more than we did and most important hopefully they will not cower to a handfull of criminals as we did. The obvious deliberate unethical and underhanded nature of these contracts should not be honoured nor tolerated and possibly, wiser than us, the next generation won't stand for it.
    Better though would be for us to put an end to it now.


  9. Oh, I agree with what you say as the right way to go. Unfortunately, the courts ultimately will enforce the contracts or specify the damages for their cancellation. Civil courts may decide on the balance of probabilities but miscreants have had control of the files and there is likely little evidence still available to argue in court that cancellation of IPP contracts would be just.

    Without evidence of material wrongdoing, the courts will enforce existing contracts and probably disallow legislative efforts to void them for reasons of public policy. Just like the courts kept BC Liberals from rolling over the rights of teachers in the past – and they will do it again when Bill 22 is reviewed – the contracts forced on BC Hydro will probably be bulletproof. Remember, these guys were using taxpayer dollars to hire the best legal architects in the province and it was known that future government would want out. Without seeing the contracts, we can't know for sure, but I'd bet my entire allowance that the documents favour the private producers.

    This IPP scheme was designed to privatize profits while the economic risks were left almost entirely with the public.


  10. By a very unlikely sequence of events….I won't elaborate in the event it would make the other party uncomfortable…..I met a recently dismissed high ranking engineer/planner from BC Hydro….let go due to budget cuts imposed by our current (no pun intended) government. This person was amazed at the knowledge out there amongst us commonfolk about the fallacy of the IPP progam….and about how us commonfolk are proud of our BC Hydro engineers and know they are not the cause of this ….that person felt vindicated and relayed to me how many times their commonsense action plans were waylaid by political directions. It is treasonous.


  11. This is why whistleblower protection is needed. I've talked with a few insiders, both at BCH and with IPPs. They know the risk of speaking out on the record; there are personal, financial and professional restraints that could have devastating consequences. Few people dare to take the risks of frank disclosure.


  12. Boy, did you hit the nail on the head Norm. “Socially unimportant people” clog jails for doing relatively minor crimes, while we fawn over “leaders” and business elite who are simply stripping the province of everything that isn't nailed down.

    And we pay off the $6 million lawyer fees for the admitted felons, Basi and Virk, who took bribes while they drew comfortable salaries as trusted high-level civil servants.

    The lack of respect and lack of decency in the political class (both parties) is palpable, ditto their foot-soldiers like police, health care providers, and the so-called justice system.

    Is it too late? Have the public been so dumbed down they can't see what's happening or have lost the ability for critical thinking? The anger of the students in the street in Montreal is needed here in BC.

    Our children and grandchildren will pay? Well some of them. More and more I'm hearing people say they are seriously considering leaving Canada. They're frightened about what's going on here. Can't blame them.


  13. It's not rocket science. For us to turn this doomed ship around we have to start devaluing financial and professional restraints. If we run scared of this corporate and government bullying, if no one decides to take a stand, we will be like lambs to the slaughter. And we will be condeming our children and grandchildren to the same.

    Eventually, some brave souls will start to stand up for their values and principles. And then more will follow, and some more. And then we will have broken these self-imposed chains.

    Study history. Has always been thus and so.

    Until then, all our talk is meaningless noise.


  14. Norman, I agree also with what you beleive, my hope is that by the next generation things may have evolved enough that what these courts may find will matter little and be irrelevent, common sense may return to us.
    The idea that this must continue and we are bound by it is disturbing and i can't imagine that my grand children will be held to these archaic beliefs.
    We won't survive the status quo nor should we.
    Our trust in this system is woefully challenged as it is broken.Look to montreal for proof. It can't be sustained, who knows what tommorrow will bring? Hopefully the return of common sense.


  15. Has the public been dumbed down? I don't think so. In the Angus Reid poll released a few days ago, the BC Liberals are supported by only 17% of females of all ages (they tend to be more sensitive to social issues than men) while both men and women aged 18-34 offer 59% support to the NDP (the Greens have another 9% of that age group).

    Admittedly, it's taken quite a while for people to wake up but they've been fed a steady stream of propaganda and misinformation.


  16. Actually according to what private companies do (like the ones Romney bankrupted) is declare bankruptcy protection get out of the contacts sell off a few assets and start all over again.


  17. BCH…yes…absolutely a parallel situation with regard to the respect given to working professionals by administrative personel or political appointees. There seems to be a whole generation of inept administrators in many government offices that are lacking in commonsense, workplace knowledge and ethics. They have not spent time actually adding value to something as part of their daily routine. Where did they come from? Who are their mentors? It is almost as though arrogance was a course credit. One could extrapolate that to include mainstream media management.


  18. hmmm…I took your reference to BCH incorrectly…it became BC Health in my mind (not that there is such an entity by that name)…Freudian slip due to recent household conversation. It is not like me to get sidetracked from a BC Hydro thread. The inept administrator comment seems apropos either way.


  19. Norm I constantly tell myself that no, no, Norm is just too tepid and too willing to cave in to what to him appears to be the inevitability of the success of the scum that stole our railroad and are in the process of stealing everything else that isn't nailed down. The reason I fight this seemingly logical surrender to the “bulletproof” nature of the miscreants' scams, is that would only leave the option of either severe depression or blowing up stuff and shooting people. Keep in mind that everything Hitler did was “legal” under “his” law, likewise with Pinochet.

    Perhaps when Brokaw refers to our parents cohort as the great generation, it was more than simply winning WWII that they accomplished, they also with the leadership of FDR managed to deal with the great depression in much more just and equitable manner than today's politicians who are totally in thrall to the very fraudsters, banksters and outright criminals who are continuing to do their best to create the Really Great Depression, rather than address the very real problems that face our planet.

    The other great accomplishment of that generation was to hold the bad guys accountable at Nuremburg, something that today seems impossible when it comes to fraud artists and war criminals. But hopefully there is a tipping point, and hopefully it comes in time to be dealt with with due process rather than outright violent revolution. I have no doubt it will be dealt with, the status quo is unsustainable, the only mystery is can we solve it in a civilized manner or soon start living in Mad Max' World.

    I have to admit, the insufferable Coleman is clever in a feral way if he is trying to get his hooks into diverting BCLB profits to him and his friends, because they have spent over a decade creating a world in which “we'll be paying every time we unscrew the top of a wine bottle or sip from our favourite keg” is a scenario that we'll want to enact often! It's enough to drive a deacon to drink………


  20. “The other great accomplishment of that generation was to hold the bad guys accountable at Nuremburg, something that today seems impossible when it comes to fraud artists and war criminals”

    Perhaps I should amend the statement above to add “unless they are African, Eastern European or sitting on 'our' oil”


  21. It is my firm belief that action by the BC Liberal Party and the Premier and cabinet are liable for criminal action over their handling of BC Rail sell-off and the BC Hydro IPP rip-off. Further, actions by the BC Liberal Party, its Premier and cabinet with buying a guilty plea in the BC Rail corruption case for $6 million proves that they are scared of police involvement.

    Now look at the SkyTrain police caper where the majority of transit police are retired or semi retired RCMP types, collecting full salaries, while at the same time collecting pensions, otherwise known as double dipping. One could well say the plum of double dipping may have mitigated any serious investigations by the RCMP.

    The Liberal era in BC may well be regarded as the era of organized crime and how they got away with it.


  22. The Globalization of Poverty by Chossudovsky – chapter 19 – The structural Adjustment of Developed Countries

    “Moody's credit rating of Canada's Public Debt was a major factor in the lay-offs of public employees and the closing down of Provincial-level hospitals. Provinces have been obliged to “downsize” health, education and social security. In turn, under the Canadian privatization program, imposed by WALL STREET, large amounts of provincial property were put on the auction block with the entire railway network of Canadian National (CN) sold off on international capital markets.

    This dismanteling of the state, however is not limited to the privatization of public utilities, airlines, telecoms and railways – corporate capital control aspires to privatize health and education and eventually aquire control over all state-supported activities. Under WTO definition of “investment”, cultural activities, the performing arts, sports, municipal level community services, etc, are slated to be transformed into money-making operations. In turn, corporations vie to establish their control over water, electricity, national highways, the inner-city road network, national parks etc.”

    The imperial power of United States of America!


  23. I agree with Evil Eye's comments whole heartedly. In Quebec there is currently an “anti corruption squad” under the provincial police, that are investigating corrution in Quebec, after the last round of scandals inside and outside, of government. Former politicians and developers, are amoungst those being arrested and charged.

    To anyone listening, to the real voice's of the people in this province…we desperately need our own version of this, and we need them now. This present government,”is” a crime in progress! We need a task force to investigate, the wide ranging corruption over the past 11 years, that has resulted in the “legalized” theft of taxpayer resources, under the “guise” of government downsizing and restraint. This version of “economic deviance” must be halted and the alledged perpetrators, charged, convicted and jailed, if they are found guilty of crimes, relating to this.

    We need Canadian governments to realize that “the Americanized corporate version of government”, has become a “real problem” in the Western world, and threatens the taxpayers at all levels. The assets of this country and this province, are not for the priveldged few to plunder, at the expense of the rest of us.


  24. “I suspect that the contracts written for power deliveries over the next four decades will be very one sided in protecting IPP's from cancellation without huge payouts.”

    The BC Liberal government set a precedent when they tore up the contract with BC's teachers. If whatever party ends up in government can drum up enough supporting public opinion (easy since all they have to do is share the ugly truth) then those contracts might not be a large problem.


  25. Clearly, these actions by Liberal politicians, show that the public interest was not protected but exploited. Why bother making them take an oath? Perhaps treason should be pursued, and if proven all contracts signed by this government will be null and void.


  26. It's never too late. Just grow a pair and elect a government that put the people of BC above the politicians, crooks and lobbyists alike. REVERSE the sale, heck, just take it back and do what Chavez did when he re-nationalized the oil in Venezueal… smile and send every voter more cash in their wallets by drastically reducing the price of electricity.

    Renegotiate the terms that have been drafter with the private electrical companies since the fraud, heck, tear them up and throw the paper in the air and do a happy dance under it. Who's going to stop us? Then, turn around and sell our electricity at a marked up premium to anyone outside of British Columbia, who still wants it.

    Forgive the debt because it is based on an illegal sale anyways.

    While you're at it, open the books on BC Rail as well.


  27. We want our BCR back, which Campbell thieved and corruptly sold. We want the priceless Real Estate that went with the BCR. We want our rivers back, Campbell thieved and sold. The rape of our rivers is criminal. The price of our hydro obscene. The stupid smart meters, also a scam by Campbell. Campbell's shipping our mills to China, along with our raw logs. Freighter after freighter of our raw logs have gone to China. 12,000 more BC mill workers will be laid off, because of a shortage of logs. Neither Campbell nor Christy have done any reforestation. The filthy diseased fish farms, killing off our wild Salmon.

    The Campbell/Clark BC liberals, that were involved with the theft and sale of our BCR, and the destruction of our BC hydro, all belong in prison.

    Nor do we forget Harper and Campbell's plot of dismantling BC, and forcing the HST onto us. Campbell twice lied, to be re-elected for two different elections. Harper is the only one, who is under investigation for, election fraud and the robo-calls.

    We are living in very evil times


  28. Thanks Norm, I have kids older than Tsakumis and I didn't start breeding until I was in my 30's, so you can imagine how difficult this is for me!


  29. When the government changes, after the next election, could the new government not pull an WAC Bennett & expropriate the IPPs. WAC did it to B.C. Electric & it became BC Hydro. Actually did it the day after Del Grauer's funeral.

    It would work, if they expropriated the IPPs. The could pay them “fair market value” & that would be the end of it. It would cost us less than what these IPPs will cost us over 30 or so yrs.

    If they hold an inquiry into B.C. Rail, perhaps a good look at BC Hyrdo is also in order. If the contracts were signed & there were “benefits” to the politicians then it would have been illegall. If the contracts were signed under illegal circumstances, well…. I'd suggest we just take them back. Illegal gotten gains & all that.


  30. Gwen and I are coming up on our 43rd anniversary soon and we're still learning most every day. Soon, I might even learn to punctuate quotations within quotations.

    In fact, despite being ancient, my joy of reading, exploration and learning has never been stronger. I am convinced that our grey cells are like other parts of the body, they get stronger with frequent use and weaker through idleness.


  31. If only we could get the other 99% (the ones that are working, taking their kids to soccer practice, trying to eke out an existance) to get as incensed as these bloggers, then perhaps we could slay the dragon. My concern is that we are preaching to the converted.
    In spite of my (and your) efforts I find the majority of people are unaware of Norm's, Alex's, Ian, Harvey's, etc. blogs. It is SO discouraging. If the 99% were HALF as militant as those misdirected people in Quebec we wouldn't have to rely on the courts to establish justice…


  32. A year ago, there were a few thousands reading here each month. Now, its many tens of thousands. The growth trend suggests that a year from now it will be in six figures each month. Alex Tsakumis is already reaching those numbers. Many British Columbians are hungry for expressions that don't merely represent corporate interests and they are looking elsewhere.

    David Beers and The Tyee had unprecedented response to their fundraising requests. Radio BC Liberal (CKNW) lost its long held leadership, dropping to #3 in the marketplace and headed down with a bullet. Look at the by-election results, the polls and the panic stricken behaviour of BC Liberals and friends of theirs like Hochstein.

    Kinsella and Coleman are rushing to close the LDB fraud because they know the jig is up.

    Don't be discouraged…keep working. The tide is turning.


  33. The answer is simple – ANY violations of fishery conservation will end in forfeiture of any and all facilities for power generation, no ifs ands or buts. I know Harper has gutted the fisheries concerns, but the provincial government could stand up to this. After the libs get the upcoming pink slips, of course.


  34. There may be a way to cancel the IPP's. Declare BC Hydro bankrupt and disband it to only legislate a NEW Provincially controlled company to manage the electrical system. Is that doable?


  35. Norm it's just a matter of changing the rules. After all, we're had 10 years of rule changes inder the Fiberals. Change the legislation and then bankrupt BC Hydro.


  36. Site C is being prepared to supply electricity to the oil & gas industry in the North of BC.
    Could the oil & gas industry be forced to purchase Run of river electricity, through the grid.for it's electrical power?
    This could force the Run of river gang to reduce prices?
    Perhaps we could have a two tier power supply.
    Hydro electric for the homeowner & Private Power for business?


  37. Best idea in a long time. Existing domestic users use low cost heritage power while new industrial and commercial users use power from new commercial sources and pay the higher prices demanded by those sources. We could allow credits for job creators so the power users that pay the most would be the ones that return the least benefit to communities.

    That is so tied to common sense that it would probably pass court challenges. Let's think about this and fashion a changed policy.


  38. I would be careful about just which rivers are going to be used….and which lakes are going to be drained…they would have to be situated close to the industry. I am more in favour of a mini molten salt thorium reactor right on the mine site….and of course the CEO of the company would be required to live a minimum of 6 months of the year in camp, on site, next to the reactor….the power source that is making him money. That being said, I am in favour of having industry locate here where the power is economical and all of the workers can support our economy….I am not in favour of developing these sources for export. Too much environmental havoc for little reward….and…I am not in favour of the general taxpaying public subsidizing corporate profits by way of reducing their costs.


  39. We already do have a two tiered rate for homeowner and business. I pay 10.5 cents/kw hr for MY electricity while the proposed Abacus mine will pay 3.5 cents/kw hr for theirs. (although I can't confirm the mine's rate, no-one has contradicted it in the last 3 months, so I asssume that is correct.)


  40. Also, farmers get a reduced rate in the summer. I have a friend who grows corn near Agassiz and the cheaper rate helps pay to keep the water pumps running.


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